Four months after Microsoft first unveiled its new mixed reality (MR) platform, the company has announced that the first developer kits for it will start shipping this month.

The announcement, made at the annual Game Developers Conference in San Francisco Wednesday, also states that the developer kit will come with an Acer prototype head-mounted display (HMD). While pricing for the developer kit wasn't specified, the consumer version of HMDs running on Microsoft's MR platform are expected to start at $299 and will begin shipping later in 2017. Some of Microsoft's other initial hardware partners for MR include Dell, HP, Lenovo, and Asus.

One of the most telling takeaways from the announcement is that Microsoft is doubling down on its dedication to MR and attempting to move away from its "holographic" classification, an image it created with the release of its first altered reality endeavor, the augmented reality (AR) HoloLens. When Microsoft first unveiled this new MR platform in October it stressed that the VR technology would be given an added layer of depth with the company's HoloLens technology. However, the company is now trying to separate the two; Microsoft stated Wednesday that it would cease to refer to its platform as Windows Holographic, as it was previously known, opting instead to call it "Windows Mixed Reality."

MR is a lesser-known segment of the altered reality space today, with AR and VR commanding significantly more mindshare. However, Microsoft's dedication to developing AR and VR's lesser-known cousin could help raise the classification to prominence. While AR features stagnant digital images in a real-world environment, and VR features a completely virtual environment, MR, sometimes referred to as hybrid reality, entails digital images that can interact with a consumer's true environment, or a virtual world that takes a consumer's true environment into account. MR is, to some degree, a more capable umbrella category that contains AR as a subsegment. As a caveat, there are those in the altered reality industry who believe that MR should not exist as a standalone category.

In the long run, MR for Microsoft represents the opportunity to be dominant in one of the next major computing platforms after missing the boat on mobile. MR, in Microsoft's long-term plan, will have myriad applications because of its ability to blend digital properties and a consumer's true location.

The virtual reality (VR) market has made significant strides throughout 2016.

New VR headsets like the Oculus Rift and the HTC Vive debuted amid great consumer anticipation, while VR content launches kept pace, with Batman: Arkham VR and Chair In A Room garnering encouraging download totals.

At the same time, industry groups and conferences brought developers, investors, and content producers together, helping to further ramp up buzz in this nascent space.

BI Intelligence, Business Insider's premium research service, forecasts shipments of VR headsets to spike by 1047% year-over-year (YoY) to 8.2 million in 2016. This growth will help propel the virtual reality space to exceed $1 billion in revenue for the first time, according to research by Deloitte. Powering that growth is an estimated 271% increase in investment in AR (augmented reality) and VR companies from 2015, according to estimates from CB Insights.

But while 2016 has indeed been an important year for the VR market, it hasn't necessarily been a big one — at least not compared to its future growth potential.

VR headset shipments will continue to grow in the years ahead, driven by the introduction of new content that will appeal to a broad swath of users.

Jessica Smith, research analyst for BI Intelligence, has compiled a detailed report on virtual reality that explores the highly fragmented and volatile VR market that emerged in 2016, lays out the future growth potential in numerous key VR hardware categories as driven by major VR platforms, and examines consumer sentiment and developer excitement for VR, presenting which headset categories and platforms are most poised for success in the near- to mid-term.

Here are some key takeaways from the report:

This has been an important foundational year for the VR market. New hardware and content have brought more options to market to appeal to a wider set of consumers.

But the growth seen this year is merely a foreshadowing of the future. The highly fragmented VR market today will eventually narrow as the market grows and matures.

After considerable progress in 2016, the VR market is ripe for transformation in 2017. Developers, consumers, investors, and hardware makers have a host of options from which to choose, each with their own strengths and shortcomings.

The environment is poised for the first killer VR app to hit the market sometime in 2017, which will be a major catalyst for consumer adoption of VR hardware.

Not all headset categories and platforms will emerge as winners in the near future. More immersive headsets that offer the best VR experiences are too expensive for most consumers. Alternately, affordable headsets that rely on smartphones as processors offer sub-par experiences that can induce sickness.

In full, the report:

Identifies the major players in today's VR hardware and platform markets.

Estimates future growth of each of the major VR categories.

Explores barriers to mass market consumer adoption for each of the VR hardware categories.

Considers how developer sentiment is driving the growth of various platforms.

Assesses how the market will shake out over the next five years in terms of size and the success of various VR hardware categories.

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